Payday Lending Industry Opposes Ohio Senate's Changes To Bill

Ohio Senate Finance Committee listens to testimony in response to the changes made to HB123, a bill to implement tougher regulations on payday lenders.

ANDY CHOW
/ STATEHOUSE NEWS BUREAU

The Ohio Senate is introducing changes to a payday lending crackdown that passed the House by a big margin. Supporters of the legislation say it will help shutdown predatory lending and a cycle of debt.

Listen

Listening...

/

0:50

The proposed changes

The Senate's changes raise the maximum payday loan amount to $1,000. The bill also caps the principal and fees on those loans at 7% of the borrower’s monthly income, and says total costs, meaning fees and interest rates, cannot be more than 60% of the original loan.

Ted Saunders is CEO of Community Choice Financial, the parent company of CheckSmart. He says the changes end up hurting the payday lending industry while favoring credit unions.

“You notice there’s no prohibition on charging customers any other fees if you’re a banker credit union but I’ve noticed in here that I as a licensed check casher if I want to deliver this loan in the form of a check I’m capped at $10 why me?” he said.

Supporters of the original, tougher bill, say they’re okay with these changes and still want to see the legislation move forward.

The Ohio Senate plans on voting the bill out of its chamber on Tuesday.

Related Content

The bill to clamp down on payday lending interest rates and fees has hit another wall. After passing out of the House with strong support, Senate Republicans have halted the bill in committee in order to consider possible changes.

Democrats on the committee tried to force a vote on the bill, but Senate Republicans were able to rally enough opposition to stop that vote.

A citizens group is trying to put an issue on the ballot that would cap the interest rates of payday loans at 28 percent without the loopholes in current law. The ballot measure is in reaction to lawmakers failing to move on a similar bill. But House leaders say they’re ready to move forward.

Republican Rep. Kirk Schuring of Stark County says lawmakers are close to rolling out a revised bill, but it’s unknown how closely it will resemble the current bill to cap interest rates, which have reportedly skyrocketed to 590 percent.